Answer:
Total Stockholder's equity = $6,760,000
Explanation:
Note:
Missing content;
Cash dividends = $20,000
Treasury stock = $600,000
Share repurchase = $20,000
Common stock = $4,000,000
Retained earnings = $3,000,000
Computation:
Common stock = $4,000,000+$400,000
Common stock = $4,400,000
Retained earnings = $3,000,000+$600,000-$500,000-$400,000-$40,000 Retained earnings = 2,660,000
Total Stockholder's equity = Common stock + Retained earnings - Treasury Stock
Total Stockholder's equity = $6,760,000
If (in one month) I make a total of 10 hours of calls at standard hours, how much more or less will I pay for a Basic contract than for Premium
Answer:
I make a total of 10 hours of calls at standard hours, how much more or less will I pay for a Basic contract than for Premium is discussed below in detail.
Explanation:
The quantity of hours of free calls in a year is 10.
explanation:
From the provided report it is obvious that for basic understanding the number of hours of available calls in a month is 3.
We understand that 1 year is equivalent to 12 months.
1 year = 12 months.
For the basic contract:
The number of hours of available calls in a month = 3
Using the above transformation, we get
The number of hours of available calls in a year = 3 × 12 = 36
Therefore the number of hours of available calls in a year is 36.
A basic contract can be defined as one in which a user can make use of some features but does not have access to some features which would need additional payment to get access to.
As a result of this, a premium contract can be considered as the plan where all the available options are at the disposal of the user and has a slight edge over a basic contract user.
With this in mind, we can note that the pricing plan of the basic contract would be lower than that of the premium contract.
Please note that you question is incomplete and i gave you a general overview to help you get the right answer
Read more here:
https://brainly.com/question/11863216
Which advertising medium goes hand-in-hand with newspaper advertising? ads go well with print ads because they remind customers to check for further details in local newspapers.
Answer:
Printed ads go hand in hand with newspaper advertising because they usually consist of impactful graphical representations of the service or product that is being announced, and they tend to take a significant space of the newspaper page where they are printed.
In fact, printed ads have been the most important financing source for newspapers, until very recently when printed newspapers have been going out of circulation due to low readership, and newspapers companies have been relying more on online advertising and user subscriptions.
Answer: Promotional advertising
% interest compounded annually until Bob retires on his 65th birthday. How much is the IRA worth when Bob retires
Answer:
The worth of the IRA when Bob retires at 65 is $190,706.57.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Bob makes his first $1,200 deposit into an IRA earning 6.5% compounded annually on the day he turns 24 and his last $1,200 deposit on the day he turns 44 (21 equal deposits in all.) With no additional deposits, the money in the IRA continues to earn 6.5% interest compounded annually until Bob retires on his 65th birthday. How much is the IRA worth when Bob retires?
The explanation of the answer is now given as follows:
Step 1: Calculation of the future value of the IRA when Bob turns 44
This can be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:
FV44 = M * (((1 + r)^n - 1) / r) ................................. (1)
Where,
FV44 = Future value of the IRA when Bob turns 44 = ?
M = Annuity payment = $1,200
r = annual interest rate = 6.5%, or 0.065
n = number of years = 44 - 24 + 1 = 21
Substituting the values into equation (1), we have:
FV44 = $1,200 * (((1 + 0.065)^21 - 1) / 0.065)
FV44 = $1,200 * 42.3489537330236
FV44 = $50,818.74
Step 1: Calculation of the future value of IRA when Bob retires at 65
This can be calculated using the simple future value formula as follows:
FV65 = FV44 * (1 + r)^n ....................................... (1)
Where;
FV65 = Future value of IRA when Bob retires at 65 or the worth of the IRA when Bob retires at 65 = ?
FV44 = Future value of the IRA when Bob turns 44 = $50,818.74
r = annual interest rate = 6.5%, or 0.065
n = number of years = 65 - 44 = 21
Substituting the values into equation (2), we have:
FV65 = $50,818.74 * (1 + 0.065)^21
FV65 = $50,818.74 * 3.75268199264653
FV65 = $190,706.57
Therefore, the worth of the IRA when Bob retires at 65 is $190,706.57.
The document that the purchasing department-aã¡-tothe vendor to place an order is called the:________. A. Invoice approval B. Receiving report C. Purchase requisition D. Invoice. E. Purchase order
Complete Question:
The document that the purchasing department prepares and sends to the vendor to place an order is called the:
Group of answer choices
A. Invoice approval.
B. Receiving report.
C. Purchase requisition.
D. Invoice.
E. Purchase order.
Answer:
E. Purchase order
Explanation:
The document that the purchasing department prepares and sends to the vendor to place an order is called the purchase order.
A purchase order is typically a multi-copy commercial document that is prepared by the buyer who is interested in ordering goods and sent sent to a vendor (supplier) to place an order.
Generally, one copy of the purchase order is sent to the vendor (supplier) of the goods while the other copy is sent to the accounts payable department of the company, so as to enable them compare it with the invoice issued by the vendor or supplier for accuracy and accountability.
Additionally, a purchase order comprises of informations such as quantity of goods being ordered, price, type etc.
The market risk premium is 10.0 percent, and the risk-free rate is 4.2 percent. If the expected return on a bond is 10.5 percent, what is its beta? (Round answer to 2 decimal places, es. 15.25.) Beta of the bond
Answer:Beta of the bond = 0.63
Explanation:
According to the CAPM, Capital Asset pricing mode formulae, The expected return is given as
Expected return= Risk free rate + Beta ( Market premium)
where
Expected return = 10.5 percent
Market risk premium =10.0 percent
risk-free rate is 4.2 percent.
Expected return= Risk free rate + Beta ( Market premium)
Putting their values and solving, we have
10.5% = 4.2%+ Beta (10.0%)
10.5 %- 4.2%=Beta (10.0%)
Beta=10.5 %- 4.2%/10.0%
Beta=0.63.
Beta of the bond = 0.63
E-Eyes just issued some new preferred stock. The issue will pay an annual dividend of $27 in perpetuity, beginning 16 years from now. If the market requires a return of 4.1 percent on this investment, how much does a share of preferred stock cost today?
Answer:
$360.43
Explanation:
Calculation for how much does a share of preferred stock cost today
First step is for us to calculate the price of the stock in Year 15 which is a year before the first dividend payment.
P15= $27 / .041
P15= $658.54
Last step is to calculate for the price of the stock today
P0= $658.54/ (1+.041)^15
P0= $658.54/ (1.041)^15
P0=$360.43
Therefore the amount that a share of preferred stock cost today will be $360.43
Schedule of Cash Collections: Booth Ltd. makes collections on all sales according to the following schedule:
25% in month of sale
75% in month following sale
The following is a list of budgeted sales for the next four quarters:
1st quarter 2nd quarter 3rd quarter 4th quarter
Budgeted Sales $250,000 $240,000 $260,000 $280,000
Required:
Calculate the budgeted cash collections in the 2nd quarter.
Answer:
$247,500
Explanation:
Budgeted cash collection
Amount
Cash collected from 2nd quarter sales $60,000
(240,000*25%)
+ Cash collected from 1st quarter sales $187,500
(250,000*75%)
Budgeted cash collection in 2nd quarter $247,500
Answer:
B-More products were sold in the 1st quarter than in the 4th quarter.
Explanation:
I got it right on Edge2020
There is a bond that has a quoted price of 105.957 and a par value of $2,000. The coupon rate is 6.90 percent and the bond matures in 24 years. If the bond makes semiannual coupon payments, what is the effective annual interest rate?
Answer:
The effective annual interest rate is 7.02%.
Explanation:
The effective annual rate can be computed using the following formula:
EAR = ((1 + (i / n))^n) - 1 .............................(1)
Where;
i = Stated coupon rate = 6.90%, or 0.069
n = Number of compounding periods in a year = 2
Substituting the values into equation (1), we have:
EAR = ((1 + (0.069 / 2))^2) - 1
EAR = 1.07019025 - 1
EAR = 0.07019025, or 7.019025%
Approximating to 2 decimal places, we have:
EAR = 7.02%
Therefore, the effective annual interest rate is 7.02%.
If the total adult working population of Country X is 450 million, the number of unemployed people is 95 million, and the number of employed people is 245 million, what is the labor force participation rate? Round your answer to the nearest tenth.
Answer:
Labor force participation rate = 75.55% (Approx)
Explanation:
Given:
Working population = 450 million
Unemployed people = 95 million
Number of employed people = 245 million
Find:
Labor force participation rate
Computation:
Total labor = 245 + 95 = 340 million
Labor force participation rate = [340 / 450]100
Labor force participation rate = 75.55% (Approx)
If the total adult working population of a country X is 450million, then the Labor force participation rate is 75.55% (Approx)
What is the population?The term population defines as the number of people in an individual region or area or country, no matter whether it be a city or town, continent, world, region, or the country.
Computation of Labor force participation rate:
According to the given information,
Working population = 450 million,
People Unemployed = 95 million, and
Employed People = 245 million
Labor force participation rate = ?
First, find the value of the total labor, according to the given information,
[tex]\text{Total Labor} = 245 \text{Million}+ 95\text{Million}\\\\\text{Total Labor} = 340 \text{million}[/tex]
Then, the Labor force participation rate are:
[tex]\text{Labor Force Participation Rate} = \dfrac{\text{Total Labor}}{\text{Working Population}}\times 100\\\\\text{Labor Force Participation Rate} = \dfrac{340}{450}\times 100\\\\\text{Labor Force Participation Rate} = 75.55\%[/tex]
Therefore, the labor force participation rate is 75.55% (Approx).
Learn more about the population, refer to:
https://brainly.com/question/905400
Zoogle, Inc decides NOT to develop a self-driving car because of the possible lawsuits. What type of risk management decision is this
Answer: 3) Avoidance
Explanation:
The decision made by Zoogle Inc. not to develop the self-driving car as a result of potential lawsuits is a risk avoidance decision. As the term implies, Zoogle is avoiding the risk of being hit by lawsuits by removing the principal reason that they may be sued which is the car.
In so doing they do not have to worry about any future lawsuits in that regard because the reason for the lawsuits would never have been initiated in the first place.
Why do we practice making associations with simple and mundane problems and resources?
Question Completion with options:
Select all that apply.
A. To bring some light-hearted humor to practicing a rather difficult behavior.
B. Things like losing your keys and empty ink cartridges are actually more important of a problem than expected.
C. Due to their simplicity, there is a “right” or “perfect” solution to be identified.
D. Removes the risk associated with trying to find the “right” or “perfect” solution.
E. They are problems and resources that most people have experience with or can relate to.
Answer:
We practice making associations with simple and mundane problems and resources because:
E. They are problems and resources that most people have experience with or can relate to.
Explanation:
Based on their simplicity and commonness, such problems and resources are malleable to daily practice and association. Most people can also relate to such problems and resources because they have either experienced the problems or been associated with the resources for solving the particular problems. So, making them a subject of practice, it becomes easier to use them as anecdotes for teaching and enlightenment. Experience, some claim, is a good teacher.
The town of Smallsville is considering building a museum. The interest on the money Smallsville will have to borrow to build the museum will be $1,000 per year. Each citizen's marginal benefit from the museum is shown in the following table, and this marginal benefit schedule is public information.
Citizen Marginal benefit from museum ($/year)
Anita…………………………. 340
Brandon…………………………. 290
Carlena…………………………. 240
Dallas…………………………. 190
Eloise…………………………. 140
a. Assuming each citizen voted his or her private interests, would a referendum to build the museum and raise each citizen's annual taxes by $200 pass?
b. A citizen proposes that the city let a private company build the museum and charge the citizens a lump-sum fee each year to view it as much as they like. Only citizens who paid the fee would be allowed to view the museum. If the private company were allowed to set a single fee, would any company offer to build the museum?
c. A second citizen proposes allowing the private company to charge different prices to different citizens and auctioning the right to build the museum to the highest bidding company. Again, only the citizens who pay the fee may view the museum. What is the highest bid a private company would make to supply the museum to Smallsville?
Answer: See explanation
Explanation:
a. This has been solved and attached.
Note that the net benefits was calculated as:
= Marginal benefit - $200
b. Looking at the table and information provided in the attachment, we would see that no company offer to build the museum because since their cost of $1000 can't be covered by the revenue generated. The highest revenue gotten for the single price monopolist is $760 and this can't even cover their cost.
c. Based on the scenario given in (c), the highest revenue the price discriminating monopolist would make is $1200 and coupled with the fact that the cost is $1000, the maximum bid that a private company would make to supply the museum to Smallsville is $200 ($1200 - $1000)
a. Assuming that each citizen voted their private interests, a referendum to build the museum and raise each citizen's annual taxes by $200 would pass because 3/5 (60%) of the citizens would vote in favor. They derive more marginal benefit than the head tax increase from the museum project.
b. No company would likely offer to build the museum based on a single lump-sum fee because the marginal benefits derived by the five citizens are not equal nor more than $200 each. If the private company charges above $140, not all the citizens would be willing to pay.
c. The highest bid a private company would make to supply the museum to Smallsville is $100,000. This cost is based on a 10% annual interest ($1,000/10% x 10 years) for ten years.
Thus, given the facts of the case, it would be more beneficial for the town of Smallsville to borrow $100,000 to build the museum and raise the annual tax by $200 to enable the citizens to enjoy the services of the museum while the town recovers the investment costs plus interests on the borrowed funds over time.
Data and Calculations:
Cost of Annual Interest Expense = $1,000
Citizens Marginal Net Accumulated
Benefit Benefit Net Benefit
Anita $340 $140 ($340 - $200) $140 ($0 + $140)
Brandon $290 $90 ($290 - $200) $230 ($140 + $90)
Carlena $240 $40 ($240 - $200) $270 ($230 + $40)
Dallas $190 ($10) ($190 - $200) $260 ($270 - $10)
Eloise $140 ($60) ($140 - $200) $200 ($260 - $60)
Total $1,200
Learn more about investing in capital projects here: https://brainly.com/question/7442083
Write a short message/email/memo based on the following case scenario - As head of the occupational health and safety committee at your workplace, you are concerned about the practice of stocking employee kitchenettes with free coffee and cookies. Lately, you have begun to notice that stressed out employees routinely skip lunch and instead grab handfuls of cookies to eat at their desks. While you understand the necessity for the quick snacks, you feel that there is room in the budget to provide healthier alternatives to these high-fat, carbohydrate-laden snacks. In fact, your committee voted in favour of this but you feel some employees will resist this and be upset to lose the cookies and coffee. -- Now, write a short message/memo/email to all staff announcing that, effective next month, kitchenettes will be stocked with a selection of fresh fruit, whole-grain snacks, and spring water instead of the usual cookies and coffee. Consider which approach you should use -- direct or indirect -- before you write it.
Answer:
You know that your not supposed pile your home work on this program? It’s unconstitutional.
Explanation:
Alford Hardware had a profit margin of 12.7% and return on assets of 10.8% in 2022. What was their asset turnover?
Answer: 0.85
Explanation:
Given the variables in the question, Asset Turnover is calculated by;
= Return on Assets / Profit Margin
= 10.8%/12.7%
= 0.85
The Option Clearing Corporation is owned by _________. the exchanges on which stock options are traded the Federal Deposit Insurance Corporation the Federal Reserve System major U.S. banks
Answer:
the exchanges on which stock options are traded
Explanation:
The Option Clearing Corporation is a clearing house based in the United States and they provide settlement, clearing, and central counterparty services.
They deal in options such as options, futures, and security lending.
The OCC is owned by the exchange on which they are traded such as Intercontinental Exchange's NYSE ARCA, NYSE MKT, Nasdaq and Cboe Global Markets.
A policy is a specific action to be taken or not to be taken with respect to situation.
Answer
True
False
Answer:
false
Explanation:
.... I just know .......
Is the economic model of decision-making intended as a literal description of how individuals, firms, and the governments actually make decisions
Answer:
The correct response as per the given statement is "No".
Explanation:
No, but the given model has never been the dictionary definition of how transactions or judgments are currently taken by people, organizations, and companies. Economic models allow everybody to differentiate as well as organize complex sequences of underlying causes functionally that unique expression awareness among the target in less than an economy. These were founded on observations and the formation of overly simplistic circumstances.Think of a time when effective or ineffective communication affected your success at home, school, or work.
In paragraph 1, describe what happened, in detail.
In paragraph 2, explain how strong communication contributed to or could have improved the situation’s outcome. Be specific.
Answer:
Ineffective communication affected my success when I wanted to sell my skincare product to an Asian who did not really have a full grasp of the English language.
Explanation:
I experienced ineffective communication which was caused by a language barrier between me and an Asian woman to whom I wanted to sell a skincare cream. I tried explaining the benefits of the cream to her, but she seemed not to understand what I was saying. At the end of the day, she did not purchase the cream.
In order to sell skincare creams, a person must communicate the full benefits of such cream to a potential buyer since he/she might already have had something he uses before. If the woman had a strong grasp of the English language, it would have been easier for me to convince her to buy the cream as I would have employed persuasive terminologies that would appeal to her.
An example of ineffective communication was when I went to France for vacation and I tried communicating with someone in English but he didn't understand me.
Ineffective communication simply means a form of communication where the receiver can't understand the message and therefore the message wasn't conveyed properly.
An example of ineffective communication was when I went to France for vacation and I tried communicating with someone in English but he didn't understand me.
The communication was ineffective because we were both speaking different languages. It'll have been effective if we spoke the same language.
Read related link on:
https://brainly.com/question/18121179
A company had interest expense of $9,000, income before interest expense and income taxes of $20,000, and net income of $10,400. The company's times interest earned ratio equals:_______
Answer:
2.22 times
Explanation:
Interest earned ratio is computed as;
Interest earned ratio = Earnings before interest and taxes / Total interest payable
Given that;
Earnings before interest and taxes = $20,000
Total interest payable = $9,000
Therefore,
Interest earned ratio = $20,000 / $9,000
Interest earned ratio = 2.22 times
A government decision to privatize a sector of the economy formerly operated by the government is an example of _____ policy.
Answer:
Structural policy
Explanation:
This is an example of what is known as structural policy.
There are times where the problem of an economy get to be more and also last longer than inadequate demand. This problem can be caused by government policies or sometimes private practices that cause an impediment on the efficient production of goods and Also services. In other to fix a problem such as this, changes have to be made to the economy. Such changes is what is regarded as structural policy.
Sheridan Company reports the following information (in millions) during a recent year: net sales, $17,371.2; net earnings, $481.6; total assets, ending, $6,899.2; and total assets, beginning, $6,806.4. Calculate the (1) return on assets, (2) asset turnover, and (3) profit margin ratios. (Round answers to 1 decimal place, e.g. 15.2% or 15.1.)
Answer and Explanation:
The computation is shown below:
As we know that
1. Return on assets is
= Net income ÷ avg total assets
where,
Avg total assets is
= (opening total assets + closing total assets) ÷ 2
= ($6,806.4 + $6,899.2) ÷ 2
= $6,852.8
Now return on asset is
= $481.6 ÷ $6,852.8
= 7.0%
2. Assets turnover ratio = net sales ÷ avg total assets
= $17,371.2 ÷ $6,852.8
= 2.5 times
3. Profit margin = net income ÷net sales
= $481.6 ÷ $17,371.2
= 2.8%
If a country experienced a natural disaster which wiped out a quarter of its capital stock, what would happen in the long run to its potential GDP?
Answer:
the options are missing:
a) It would at first fall dramatically and remain below its pre-disaster level indefinitely.
b) The capital stock would remain unaffected and continue on as usual.
c) It would fall in the short-term and then rise back to pre-disaster levels in the long-term.
the correct answer is: c) It would fall in the short-term and then rise back to pre-disaster levels in the long-term.
Explanation:
When a severe natural disaster hits a country or a region, large portions of its capital stock might be negatively affected, e.g. an earthquake and tsunami hit Japan in 2011 and halted most of the factories in the affected regions. This negative effect lasted for more than 6 months and many car factories couldn't produce normally for almost a year. That included factories in the US and other countries that used Japanese components. But after a year or so, production levels were almost back to normal.
In a(n) _____, the event is considered purposeful and includes accidents or harm caused by human error as well as organizational misdeeds such as fraud.
A) preventable crisis
B) accidental crisis
C) victim crisis
D) casualty crisis
Answer:
A) preventable crisis
Explanation:
preventable crisis can be regarded as one of dangerous threat to an organization, these can be as a result of human error, accident, some kind of fraud that can put the reputation of an organization at stake. It should be noted that In preventable crisis the event is considered purposeful and includes accidents or harm caused by human error as well as organizational misdeeds such as fraud.
The accounting records of Tuel Electronics show the following data.Beginning inventory 3,880 units at $8Purchases 8,660 units at $10Sales 9,310 units at $13Determine cost of goods sold during the period under a periodic inventory system using the FIFO method, the LIFO method, and the average-cost method.(Round answers to 0 decimal places, e.g. 125.)
Answer:
Pleas see answers below
Explanation:
1. Using FIFO
This methods assumes that goods bought first are the first to be sold in chronological order. This means that ending inventory is based on the largest purchases, while the cost of goods sold is based on the earlier purchases.
Cost of goods sold
= (3,880 × $8 + $5,430 × $10)
= $85,340
2. Using LIFO
LIFO as an inventory method assumes ,
Cost of goods sold are those that were brought in first.
= (8,660 × $10 + 650 × $8)
= $91,800
3. Using Average cost
Average cost method uses an average cost to value.
Cost of goods sold
= 9,310 × $9.38
= $87,327.80
Exercise 4
The Kay Company has the following Capital structure as at 31st March, 2019.
Based on Book Value Based on Market Value % Costs
Debentures 300,000 330,000 7
Preference 100,000 110,000 9
Equity 1,500,000 1,700,000 15
Debt 200,000 180,000 10
Required:
Determine the Weighted Average cost of capital using:
a) Book Value weights
b) Market Value weights
c) What are the factors affecting Cost of Capital?
Answer:
The Kay Company
Weighted Average Cost of Capital:
a) using the book value weights = 13.1%
b) using the market value weights = 13.2%
c) Some of the factors that affect the Cost of Capital include market opportunities, capital provider's preference, market risk, inflation, reserve policy, budget surplus and deficit, trade activity, foreign trade surpluses and deficits, country risk, and finally, but not the least important, exchange rate risk.
Explanation:
a) Data and Calculations:
Capital structure as at 31st March, 2019:
Based on Based on % Costs
Book Value Market Value
Debentures 300,000 330,000 7
Preference 100,000 110,000 9
Equity 1,500,000 1,700,000 15
Debt 200,000 180,000 10
Total 2,100,000 2,320,000
b) The WACC (Weighted Average Cost of Capital) is the cost of capital based on the relative weights of each capital class.
c) WACC based on the Book Value weights:
= 1,500,000/2,100,000 * 15% + 300,000/2,100,000 * 7% + 100,000/2,100,000 * 9% + 200,000/2,100,000 * 10%
= 0.107 + 0.01 + 0.004 + 0.01
= 0.131
= 13.1%
d) WACC based on the Market Value weights:
= 1,700,000/2,320,000 * 15% + 330,000/2,320,000 * 7% + 110,000/2,320,000 * 9% + 180,000/2,320,000 * 10%
= 0.11 + 0.01 + 0.004 + 0.008
= 0.132
= 13.2%
How has the use of computers impacted the role of accountants?
Answer: IT networks and computer systems have shortened the time needed by accountants to prepare and present financial information to management. This system allows companies to create individual reports quickly and easily for management decision making.
Answer:
it's made there job much easier because everything they need is in one place
Explanation:
can I have brainliest I'm trying to level up
Suppose Carla has $7000 to invest. Which investment yields the greater return over 4 years: 7% compounded quarterly or 6.85% compounded monthly
Answer:
The option with the quarterly compounding provides a higher future value.
Explanation:
Giving the following information:
Initial investment= $7,000
Number of years= 4 years
To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
Quarterly compounding:
Interest rate (i)= 0.07/4= 0.0175
n= 4*4= 16
FV= 7,000*(1.0175^16)
FV= $9,239.51
Monthly compounding:
i= 0.0685/12= 0.00571
n= 4*12= 48
FV= 7,000*(1.00571^48)
FV= $9,200.07
The option with the quarterly compounding provides a higher future value.
What is the meaning of this question
Answer:
You either want someone to get points or there is no meaning to the quesiton
Explanation:
ummm... common sense :)
if you could choose anything to be? (must be in essay)
Answer:
You can be one of your favorite heros.i.e avengers, marvels, etc. Or u can also choose some famous personalities such as Albert Einstein, Issac Newton, leonardo da vinchi, George Washington, etc
Even give a reason why did u choose them
Maybe that would be because of their contributions or because of their sense of humor. Like that..
You just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar.
Required:
a. If the reserve requirement is 16%, how much will your deposit increase the total value of checkable bank deposits?
b. If the reserve requirement is 7%, how much will your deposit increase the total value of checkable bank deposits
Answer:
$25000
$57142.857
Explanation:
Given that :
Amount deposited = $4000
A.) reserve requirement = 16%
The total value of checkable bank deposit is given by ;
Money multiplier * Amount deposited
Money multiplier = 1 ÷ reserve requirement
Hence ;
(1 / 0.16) * 4000
= 6.25 * 4000 = $25000
B.) Reserve requirement of 7%
Money multiplier * Amount deposited
= (1 ÷ 0.07) * 4000
= $57142.857